Chief Economic Adviser to the Indian government Arvind Subramanian on Wednesday steered clear from making any controversial remarks on demonetisation. When asked if he knew about the government’s decision to ban old Rs 500 and Rs 1,000 notes, Subramanian quoted a Buddhist saying at Express Adda, “Speak only when you can improve upon the silence.”
Subramanian was in conversation with National Affairs Editor P Vaidyanthan Iyer and Deputy Editor (Rural Affairs and Agriculture) Harish Damodaran.
He also said there’s now extreme caution about numbers we put out on demonetisation. Speaking on India’s economic growth, he said India cannot grow at 8-10% per cent unless exports grow at 15-20 per cent, adding that social harmony is a pre-condition for economic development. On job creation, Subramanian said, “Need to increase formalisation of jobs in economy from current 9-10 per cent. Challenge is not necessarily in creating jobs in India, but in degree of formalisation,” he said.
When asked about agricultural productivity, Subramanian said raising agricultural productivity is an absolute fundamental. “Don’t think we have exhausted potential of agriculture; farm productivity still low.”
Meanwhile, earlier in the day, Subramanian talked about dealing with mounting non-performing assets (NPAs). He said the idea of setting up a state-owned asset reconstruction company (ARC) or bad bank to deal with mounting NPAs is gaining traction and it needs to be created quickly. “Essentially, there seems like a growing convergence towards the idea (of state-backed asset reconstruction company). The broad idea that we should do like this is gaining traction,” he had said.
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